Data reveals that rents in six out of the top ten housing estates have seen slight adjustments, with an overall downward trend in rental transaction volumes.
According to statistics from Centaline Property, there were 287 transactions in October, a 23% decrease from 372 transactions in September. Only two housing estates, Taikoo Shing and Mei Foo Sun Chuen, had more than 40 rental transactions, while the rest of the estates remained relatively quiet. This indicates a gradual reduction in rental demand following the end of the summer rental peak season.
Alongside the decline in demand, overall rents have begun to retract. The report indicates that rents in six housing estates have decreased, such as a 4.8% drop in the average rent in City One Shatin from HK$42 in September to HK$40 in October.
This phenomenon is mainly attributed to the decrease in demand from mainland students, resulting in the dominance of the local family clientele in the rental market. Most of the transactions involve relatively larger three-bedroom units, thereby exerting downward pressure on the overall rental levels.
Adrian Cheng, Deputy Chairman of Centaline Property and President of the Residential Division for the Asia Pacific region, stated that the fourth quarter is traditionally the off-peak season for the rental market, coupled with the reduced demand from mainland students, naturally leading to a decline in rents.
He anticipates that due to the government's control measures on the property market outlined in the policy address, coupled with the increasing signs of rising interest rates, prospective homebuyers who were previously waiting have now begun to make purchases, leading to a relative decrease in rental demand. He believes that the rental market will continue to remain subdued over the next two months, with rents experiencing marginal fluctuations.
In addition, Raymond Lee, Senior Manager at Ricacorp Properties, mentioned a case study concerning a low-rise Garden Unit in Block B of Monaco Marine at Kai Tak, with a usable area of 440 square feet and an additional garden area of about 209 square feet, recently rented to a mainland professional for HK$24,500 per month, with a per square foot rental rate of approximately HK$56. The tenant paid the full year's rent upfront, amounting to approximately HK$294,000.
The owner had purchased the unit last year for approximately HK$11.843 million and has now successfully rented it out, resulting in a rental yield of approximately 2.5%. This case reflects that while rental prices for some high-end properties remain relatively resilient, the overall market appears to be relatively sluggish.
